I wonder if Roombas are wide spread enough to cause outrage if they stopped working because the company went out of business?

Isn't this an implicit risk anyone who purchases a 'smart' device takes? Every company will eventually discontinue their cloud service for a product line when it suits their needs. We have seen this countless times in technology and that anyone assumes that cycle will repeat with all these devices is fooling themselves.

For those who understand there even is a cloud service, yes. My guess is that roombas are sufficiently common that most purchasers have no idea.

This isn't a too big to fail situation. Amazon wanted to buy iRobot. iRobot wanted the acquisition to go through. The government stepped in and blocked the acquisition on the grounds that they'd rather Amazon and iRobot remained competitors.

But what actually happens now is that iRobot lays off its core staff in a desperate attempt to avoid insolvency. The regulators could wish all they want that iRoomba stay a competitive player in this space, but businesses don't run on wishes and rainbows.

I think the claim is that some other company in the robot vacuum business can buy iRobot instead of Amazon and get that sweet sweet IP

Banks have counterparty risk in the way that robot vacuum companies don't. Letting the banks go bankrupt would have destroyed a lot of perfectly viable businesses among their customers.

The cloud companies will count as TBTF too for the same reason. Although it's harder to see how Amazon might get into a "we'll have to switch the datacenters off tomorrow unless we get bailed out" financial position", since it's easier for them to trade as a going concern, if there was a risk of that happening they would definitely get a bailout.

Also, remember that the bailouts were in almost all cases loans.